JUDGMENT Rajes Kumar J.
In the present writ petition, the petitioner seeks the following relief :
"(i) issue a writ, order or direction in the nature of certiorari quashing the impugned notice dated 9-12-1998, under section 148 of the Act for the assessment year 1995-96 issued by the respondent (annexure 3 to the writ petition).
(ii) issue any other suitable writ, order or direction in favour of the petitioner as this hon'ble court may deem fit and proper in the circumstances of the case.
(iii) award costs of this petition to the petitioner."
Briefly stated the facts giving rise to the present writ petition are that the petitioner is engaged in the business of manufacture and sale of pan masala including wah gutkha in the name of Ashok Enterprises. The petitioner's business and residential premises were searched by the income-tax authorities. At the same time the business premises of Rajeev Bansal, proprietor of M/s. S. B. Agencies, Nayaganj, Kanpur was also searched, who is alleged to be a bulk purchaser of wah gutkha of the petitioner. It appears that certain books of account and documents have been seized. A perusal of the assessment order dated 13-3-1997, passed under section 143(3) of the Income Tax Act (hereinafter referred to as "the Act'), for the assessment year 1995-96 shows that on the basis of the seized sale bill book Nos. SB-23, SB-49, SB-54, SB-55, SB-56, SB-57, SB-58 and SB-100 and the statement of Rajeev Bansal undisclosed turnover was estimated at Rs. 49,14,445 and extra net profit at Rs. 9,74,334 was added in the assessment of the petitioner. The petitioner filed an appeal against the assessment order, which was allowed and the said addition of Rs. 9,74,334 was deleted vide order dated 6-3-1998. Admittedly, against the order of the first appellate authority the appeal filed by the revenue is pending before the Tribunal. In the meantime the assessing authority issued the impugned notice under section 148 of the Act on 9-12-1998, and on the demand by the petitioner the reasons recorded for the reopening of the assessment and for the issue of the notice under section 148 of the Act have been supplied to the petitioner, which is annexure No. 4 to the writ petition, which is reproduced as follows :
"In this case assessment under section 143(3) was completed on 13-3-1997. During the course of verification of the books of account seized in the case of Shri Rajiv Bansal, Prop. S. R. Agencies, it was noticed that Shri Rajiv Bansal had made unaccounted sales to the tune of Rs. 93,99,100. In the assessment order dated 30-3-1998, in the case of Shri Rajiv Bansal an addition of Rs. 10,80,896 has been made on the basis of seized material annexures 'SB-103, SB-104 and SB-105', holding that Shri Rajiv Bansal has made unaccounted sales of Rs. 93,99,100 of wah gutkha. It has further been held that Shri Rajiv Bansal was making purchase of wah gutkha from Shri Dinesh Chand Jain only since he is dealing exclusively in wah gutkha. It is further noticed that as per letter dated 20-3-1998, Shri Rajiv Bansal has stated the entire purchases whether relating to accounted for or unaccounted sales (including zero errors/irregularise) were made from M/s. Ashoka Agencies who were the manufacturer of wah brand plain and tobacco mixed pan masala.
In view of this, I have reason to believe that Shri Dinesh Chand Jain, Prop. M/s. Ashoka Agencies, has failed to disclose in his return of income filed on 31-10-1995, the sales worth Rs. 93,99,100 made to Shri Rajiv Bansal as admitted by him and as consequence income chargeable to tax has escaped assessment for the assessment year 1995-96 in the case of Shri Dinesh Chand Jain.
Issue notice under section 148 of the Income Tax Act, 1961."
Heard Sri S.D. Singh, learned counsel for the petitioner, and Sri A. N. Mahajan, learned standing counsel appearing for the revenue.
Learned counsel for the petitioner submitted that the material which was seized from the premises of Sri Rajeev Bansal was considered at the time of the original assessment order and, therefore, on the basis of the same seized material, proceedings under section 147 of the Act cannot be taken. He further submitted that the addition made on the basis of the seized sale bill has been deleted by the appellate authority on the ground that alleged seized sale bill does not show that the petitioner had made any unaccounted sale. He submitted that at the time of issue of the notice, there was no material on the basis of which belief of escaped income could be formed and therefore notice under section 148 of the Act is invalid and liable to be quashed. In support of his contention he relied upon the various decisions in the case of Calcutta Discount Co. Ltd. v. ITO (1961) 41 ITR 191 (SC) ; CIT v. Bhanji Lavji (1971) 79 ITR 582 (SC); Gemini Leather Stores v. ITO (1975) 100 ITR 1 (SC) ; Smt. Jamila Ansari v. Income-tax Department (1997) 225 ITR 490 (All) ; CIT v. Rao Thakur Narayan Singh (1965) 56 ITR 234 (SC) ; Manno Lal Kedar Nath v. Union of India (1978) UPTC 563 ; ITC Ltd. v. Superintendent of Commercial Taxes (2000) 119 STC 530 (SC) in the case of Foramer v. CIT (2001) 247 ITR 436 (All) ; CIT v. Dinesh Chandra H. Shah (1971) 82 ITR 367 (SC) ; G. R. Constructions v. ITO (1982) 135 ITR 586 (Guj) ; Sirpur Paper Mills Ltd. v. ITO (1978) 114 ITR 404 (AP). Learned standing counsel submitted that under article 226 of the Constitution of India in writ jurisdiction, this court cannot examine the sufficiency of the material and the court can only see whether there was any material and such material was relevant to form the belief of escaped income. He submitted that in the original assessment order the seized sale bill book Nos. SB-23, SB-49, SB-54, SB-55, SB-56, SB-57, SB-58, SB-100 were considered and on that basis unaccounted sale for Rs. 49,14,445 has been estimated while the assessing authority subsequently came into possession of further seized material in the form of sale bill book Nos. SB-103, SB-104 and SB-105 which relates to the unaccounted sale of Rs. 93,99,100 of wah gutkha vide letter dated 30-3-1998. Sri Rajeev Bansal stated that the entire purchases whether relating to accounted for or accounted sales were made from M/s. Ashoka Agencies, who were the manufacturer of wah brand plain and tobacco mixed pan masala. Therefore, fresh material relating to suppressed sales was in the possession of the assessing authority which were not considered earlier, while issuing the notice under section 148 of the Act on the basis of which a belief of escaped income was formed. He submitted that the material, which was made the basis for the reopening of the case was relevant and sufficient to form the belief of escaped income and therefore writ petition is liable to be dismissed.
We have given our anxious consideration to the submissions of learned counsel for the parties and also have gone through the various cases cited by both the parties. It is settled principle of law that in writ jurisdiction under article 226 of the Constitution of India, this court cannot look into the sufficiency of the material on the basis of which a belief has been formed and notice under section 148 of the Act has been issued. This court can only examine whether there was any material and whether the material is relevant to form the belief of escaped income. (vide ITO v. Lakhmani Mewal Das (1976) 103 ITR 437 (SC) ; Indra Prastha Chemicals Pvt. Ltd. v. CIT (2004) 271 ITR 113 (All) ; (2005) UPTC 53 (All)).
In the case of Raymond Woollen Mills Ltd. v. ITO (1999) 236 ITR 34 (SC), the Apex Court held that in writ jurisdiction, the court can only consider whether there was a prima facie case for reassessment and sufficiency of the material cannot be considered.
In the case of Kundan Lal Ratan Lal Jain v. AO (2000) 245 ITR 434 (All) in which notice under section 148 of the Act was issued on the basis of information relating to enquiries in which it was found that the land holders whose name was found entered had denied having leased out any land to the assessee and the court had not found the case fit for interference.
In the case of Ess Ess Kay Engineering Co. P. Ltd. v. CIT (2001) 247 ITR 818 (SC), the case was reopened on the basis of fresh material obtained in the course of assessment for the next year. The Apex Court found the material sufficient to reopen the assessment proceeding.
We have perused the assessment order dated 13-3-1997, and the reasons recorded by the assessing authority which is annexure No. 4 to the writ petition referred to hereinabove. A perusal of the assessment order shows that unaccounted sales at Rs. 49,14,455 were estimated from the seized sale bill book Nos. SB-23, SB-49, SB-54, SB-56, SB-57, SB-58, SB-59 and SB-100 and the undisclosed profit at Rs. 9,74,334 was estimated on the aforesaid undisclosed sales while the notice under section 148 of the Act has been issued on the basis of seized sale bill book Nos. SB-103, SB-104 and SB-105, which relate to unaccounted sales of Rs. 93,99,100 of wah gutkha. These bills have not been considered and made the basis for estimating the unaccounted income in the original assessment proceedings. Therefore, the belief of escaped income formed on the basis of seized material, SB-103, SB-104 and SB-105 cannot be said to be without any basis. Thus, we are of the view that initiation of the proceedings under section 148 of the Act cannot be said to be without any material or based on irrelevant material.
In the result, the writ petition is dismissed. There shall be no order as to costs.